Naomi Klein explains it better than I could, but here's the short outline:

1. Bush names James Baker to be the "Special Envoy" seeking debt relief for Iraq. The stated policy of the United States is that debt relief is critical to the future success of a free Iraq, and thus we are seeking commitments to forgive 90-95% of Iraqi debt.

2. But Baker is also an equity partner in the Carlyle Group (of "Fahrenheit 9/11" fame).

3. Carlyle has proposed to Kuwait that it transfer up to $57 billion in Iraqi debt to a foundation controlled by Carlyle, in order to "protect" it from the general move toward debt forgiveness.

4. The reason this scheme is supposed to work is, no surprise, because the guy seeking debt relief would make big money by not seeking debt relief for Kuwait. The Carlyle Group tiptoes around this subject in a way that almost sounds like a sales pitch: "Gosh, we sure can't guarantee anything now, because our head honcho is currently trying to collect the debt. But he will be stepping down soon. And the Carlyle Group has access to world leaders, so it can protect your interests."

5. Thus, Bush's envoy for debt relief has a staggering conflict of interest.

6. Carlyle even has proposals in place to invest a small percentage of the money in privatized Iraqi companies, so that it will seem like Kuwait wants to "help" Iraq by collecting the debts. That way, all the robots on the right can parrot the talking points. "The liberals are too ignorant to understand that Kuwait is trying to help Iraq."

7. It will shock you, no doubt, that debt relief efforts are failing fast under Baker's stewardship, or that he has made the assertion that America isn't seeking relief of "reparations" debt -- which is most of the Kuwaiti debt -- despite stated U.S. policy to the contrary.

And here's the coup de grace: Bush used the "pledges" of debt relief to counter Kerry's assertion that other nations aren't picking up their share of the tab in Iraq. But no nation has made any such "pledge," and his best buddy Baker has an extreme financial interest in failing at his job.

It's the damndest thing. People have raked Michael Moore over the coals for "Fahrenheit 9/11," especially his section detailing Bush-Saudi connections through the Carlyle Group. Though Moore was merely showing the implicit conflict of interest, it turns out the facts were much, much worse than we knew.